Baker Hughes is once again making moves, and this time in the APM (asset performance management) market. After the completion of the merger with GE Oil & Gas in 2017, and the announcement in 2020 of GE’s plan to fully divest its interests over the next three years, Baker Hughes then announced a joint venture agreement in June 2019 with AI software provider C3ai. Resultant from this acquisition have been the introduction of 10 new solutions including:
Baker Hughes continues to push forward in its drive to support customers’ digital transformation, and on 20th February announced plans to acquire the Australian provider of reliability solutions, ARMS Reliability.
With estimated annual turnover in the region of $15-25 million, ARMS Reliability, OnePM Asset Strategy Management system will be combined with Baker Hughes’ Bentley Nevada System1 condition monitoring solution. The combined business will sit within the Digital Solutions division, which generated about 10% of Bakers Hughes $20.7B revenue in 2020.
The combination of software solutions will provide a centralized, connected, APM solution providing a broader suite of APM services across the entire asset lifecycle.
“The acquisition of ARMS Reliability emphasizes Baker Hughes’ commitment to empower the digital transformation of our customers’ industrial assets and strategically invest for growth in industrial asset management,” said Rami Qasem, executive vice president of Digital Solutions at Baker Hughes. “This is another exciting step forward as we look to be the partner of choice and offer our customers a complete set of services across the entire industrial asset lifecycle.”
Similarly, Jason Apps, CEO, ARMS Reliability said: “This integration enables ARMS Reliability to complement its existing Asset Strategy Management and Reliability capabilities with Asset Health and Condition Monitoring,” said Jason Apps. “We are excited to join forces with Bently Nevada and Baker Hughes in broadening our capability and footprint, and the opportunities this will unlock for our customers and their digital transformation journeys.” The acquisition is expected to close in the second quarter of 2021.
Analyst takeaway
In terms of portfolio expansion this acquisition helps fill in some notable gaps in both companies’ portfolio. ARMS Reliability will benefit from Baker Hughes’ strength in asset health analytics, and greater geographic footprint. For Baker Hughes, this brings in ARMS Reliability expertise in asset strategy management, asset reliability services, and consultancy experience, as well as simulation tools that are becoming increasingly utilised in the APM space.
In addition, ARMS Reliability history in serving other industries beyond oil & gas, including power and water utilities, mining, and manufacturing, will also benefit Baker Hughes.
As with all acquisitions of software companies, alongside cultural alignment, overcoming the challenge of integration will be crucial to success. Whilst the broader capability and expertise will be attractive, providing the customer with a seamless experience and digital thread connecting the various solutions and capabilities will be core to customer satisfaction.
The acquisition of ARMS Reliability is one of many recent acquisitions in the industrial asset management space and Omdia expects more to come.
As technologies such as AI, Augmented Reality and Digital Twins are increasingly integrated into asset management solutions, the market will see continued consolidation as a plethora of start-ups are acquired to expand and augment the portfolios of larger and established players.
Omdia continues to track M&A activity as part of its Industrial APM and Predictive Maintenance research.
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